# In the matter of Arch Pharmalabs Limited

> NCLT judgment dated 2024-05-15. Citation: TCN-2024-NCLT-01335. Bank of Baroda initiated a Company Petition against Arch Pharmalabs Limited for corporate…

- **Court:** NCLT
- **Order date:** 15 May 2024
- **Citation:** TCN-2024-NCLT-01335
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/arch-pharmalabs-limited-9b49fe26

## Summary

### Background

Bank of Baroda initiated a Company Petition against Arch Pharmalabs Limited for corporate insolvency resolution process (CIRP). JM Financial Asset Reconstruction Company Limited (JMFARC), claiming to be a major financial creditor with substantial exposure, filed an Intervention Petition seeking to be heard before any order is passed in the CIRP. The Corporate Debtor had undergone debt restructuring previously, and JMFARC holds a significant portion of the debt. The Financial Creditor (Bank of Baroda) argued that the Intervention Petition is not maintainable at the admission stage of a Section 7 petition.

## Facts

Bank of Baroda filed a Company Petition to initiate CIRP against Arch Pharmalabs Limited. Arch Pharmalabs Limited had received financial assistance from Bank of Baroda and other lenders. In 2013, the loan accounts of Arch Pharmalabs Limited were classified as Non-Performing Assets. A corporate debt restructuring package was proposed but failed. JM Financial Asset Reconstruction Company Limited (JMFARC) acquired a significant portion (97%) of Arch Pharmalabs Limited's debt from 40 lenders and restructured the debt. JMFARC claims to have an exposure of over Rs. 9500 crores, while Bank of Baroda's claim is smaller. JMFARC holds 100% first and second charge on the secured assets. Arch Pharmalabs Limited specializes in manufacturing and sale of Intermediates and APIs. Arch

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## Issues and analysis

### Issue 1: Whether the Intervention Petition filed by JM Financial Asset Reconstruction Company Limited is …

**Ratio:** Ordinarily, no intervention is permissible at the stage of admission in a petition under

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**Reasoning:** The NCLT reasoned that the precedents cited by the Intervener, which were based on the

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**Interpretation:** The interpretation of Section 7 of the IBC, as per established precedents,

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**Application:** The NCLT applied the ratio to the facts of the case, noting that the

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## Parties

- **Judges:** ANIL RAJ C…; Kuldip Kumar…
- **Appellants:** Bank of B…
- **Respondents:** Arch Pharmalabs…

## Timeline

- **2023-01-01 — Company Petiti…**: Bank of Baroda filed a Company…
- **2024-01-01 — Intervention Petition…**: JM Financial Asset Reconstruction Company…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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